Please mind the gender pay gap

Posted on: 12th October 2020 in Women's Finance

Our ‘women in finance’ series focuses on the financial issues that women face.

From gender equality in the workplace to financial planning, this series takes an in-depth look at key topics of discussion.

The number of women in finance has greatly increased in the last decade. Still, they continue to face the same problems.

A study by Harvard Business School suggests that women are not getting promoted at the same rate as their male peers. This is having a negative impact on the industry.

Women in the US are under-represented in management roles across the industry according to the data. In some sectors, women account for just 6% of senior positions.

Gender diversity in financial services is not progressing as much as other traditionally male-dominated industries (such as law, medicine and academia). We need to start addressing the problem and questioning why women in finance are still struggling to get those senior roles.

Why are women in finance not getting promoted?

So, why do women find it challenging to secure senior roles within finance? Here are two factors to consider.

Women are seen as mothers

Let’s consider the following scenario.

An employer has two candidates for a senior role, a man and a woman. Both are in their early thirties and both childless. Although both are equally skilled and experienced, who do you think the employer is going to choose? 

It’s no secret that woman in finance are normally offered longer parental leave than men. Women are also statistically most likely to give up work for childcare. 

Of course, not all women want children, and many don’t give up their careers if they do. However, there is still an unspoken stigma attached to women of a certain age, rising the ranks in a company. 

Some companies are starting to recognise this and are offering equal parental leave, but it’s still not enough. A great step forward to achieving gender diversity in financial services would be to make equal parental leave mandatory, across all sectors.

Do men fear women in the workplace?

The ‘Me Too’ movement has had a major impact on how all industries operate in the last few years. 

The movement has been extremely beneficial to helping society address a lot of ongoing problems. Not only that, it has helped women feel more comfortable and able to speak out, particularly in male-centric environments. 

Here is the big question. is it actually harming women in finance and their chances of being promoted?

Some men in senior roles may have taken overly cautious steps to protect themselves. Some may avoid giving women 1:1 attention and training they need to succeed. This could be something they aren’t even doing consciously.

Are some men afraid of what a woman might say about them if they spend a lot of time together professionally? It’s a dangerous mindset, but one that could be directly impacting gender diversity in financial services, as well as other sectors.

Why do we need gender diversity in financial services?

Tackling gender diversity in financial services is not just ‘a good thing to do’, it also greatly benefits organisations, employees and customers. Having more women in finance with authority means a more diverse outlook on a company’s priorities and values.

Having more women in senior roles within a company can help improve flexible working practices and innovate outdated leadership models. It can also allow companies to access a much larger talent pool.

More gender diversity in financial services at a senior level will also positively impact culture within an organisation, as well as enriching their connection with their customers.

Although gender diversity in financial services is heading in the right direction, women are still facing these barriers, and the gender pay gap is real.

It’s time we started seeing women in finance as equals, both in their roles inside and outside of work. 

Women in finance are not just mothers or members of the opposite sex. Women are ambitious, qualified and necessary. Employers need to start recognising this, so they can best nurture and grow their careers.